Lebedevs win London local TV licence

Alexander and Evgeny Lebedev have won the hotly-contested battle for the local TV licence for London, with Ofcom awarding the franchise to the Evening Standard's London Live bid.

The victory is significant for Independent proprietors the Lebedevs, with the London franchise regarded as the most lucrative new UK TV licence to be awarded since the launch of Channel 5 in 1997.

London Live was one of five bids for the licence, and the Lebedevs will be banking on their entry into the UK TV market helping to move their newspaper assets to profitability.

The new Evening Standard-backed TV channel – which will initially offer an 18-hour-a-day service covering news, current affairs, entertainment, weather and sport – is critical to building a cross-media portfolio including the loss-making Independent, Independent on Sunday and 20p i, that will significantly boost appeal for advertisers.

An initial five-year plan for London Live will include annual marketing support of £5m, and it has been indicated that it could launch early next year.

London Live will air on channel 8 on Freeview, which will give access to potentially 4m homes.

In its submission the Evening Standard said that it will also launch London Live on Sky and Virgin Media to give blanket coverage of the capital, although this will require separate negotiations.

Sky has earmarked channel 17, but Virgin Media has not yet assigned a channel. It will cost the Evening Standard up to £1m a year in fees to launch across the two platforms, the vast majority on satellite capacity, uplink and playout fees.

These are not charges Sky levies – it is satellite companies such as Astra and Eurobird – as it costs each channel on Sky less than £100,000 a year in electronic programme guide and platform fees.

The Lebedevs' bid won out against four other high-profile rivalscompeting for the most lucrative of the 19 licences advertised by Ofcom last year as the first wave of a new generation of local TV services, a concept championed by former culture secretary Jeremy Hunt.

LondonTV, led by former newspaper executive Richard Horwood, was owned by a consortium including newspaper publishers Archant, Tindle and Trinity Mirror. Executives involved in the bid include chairman Clive Jones, the former ITV executive, and former editor-in-chief of ITV News David Mannion.

Sir Michael Lyons, the former BBC Trust chairman, headed the bid of YourTV. Steven Norris, the former Conservative MP and candidate for London Mayor, is chairman of YourTV's London bid.

Ex-Channel 4 chairman Luke Johnson chaired a bid called London8, which was supported by ITN, MeteoGroup, Riverside Studios, Time Out and the Press Association. Other key London8 figures include Paul Jackson, the ex-BBC and ITV entertainment executive and producer; William Burdett-Coutts, the producer of Black Books; and theatre director Paulette Randall, appointed by Danny Boyle as associate director for the London Olympic 2012 opening ceremony.

Former Sky executive and co-founder of pay-TV firm Top Up TV Ian West chaired a bid by Made Television.

In picking its winner Ofcom's broadcasting licensing committee said that Made in London and YourTV had "less well developed" proposals than the others, and had not demonstrated that their services would "meet the needs of the area both as a whole and in respect of its constituent parts" as well as the three other rivals.

Ofcom said that the bid by City6 (Horwood's London TV consortium) had some high quality local programming but that the "lower output of locally-targeted programming" would mean a "less locally distinctive service" than the two remaining bidders.

The Evening Standard and Luke Johnson's London8 were considered to have put forward "particularly strong applications by comparison".

"Of these two applicants [London Live] demonstrated the greatest understanding of London's diverse communities," said Ofcom. "[Its] proposals covered a significant range of [programming] subjects and would therefore meet the needs of local communities to the greatest extent. Evening Standard was also in a particularly strong position to launch and maintain its proposed service, given its proposals for promoting and marketing the channel."

London Live must start broadcasting within two years of Monday's licence award or Ofcom has the right to readvertise the service.

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